Legislation Would Prevent State From Advertising to Get More People on Medicaid
Program expanded 30 percent beyond projections
Senate Bill 542 would prohibit a state agency from using Michigan tax dollars to advertise or otherwise encourage enrollment in the Healthy Michigan plan. The legislation was introduced by Sen. Tonya Schuitmaker, R-Lawton, on Oct. 6, and has been sitting in the Senate Health Policy Committee for more than four months.
“Healthy Michigan,” is the title the administration of Gov. Rick Snyder gave to its adoption of the Obamacare Medicaid expansion. During the expansion debate in 2013, it was estimated that somewhat more than 400,000 people in Michigan would eventually enroll in the program. According to the most recent numbers, however, nearly 600,000 have enrolled so far.
Even though enrollment has far outstripped expectations, the state budget still authorizes spending $2 million annually to continue promoting the program. Of that, $1 million comes from Michigan taxpayers and the balance from federal matching funds.
“Why spend $2 million annually to promote a program that has already met and far exceeded the number of people that were expected to enroll in it?” Schuitmaker asked. “We’ve seen nothing to indicate there are metrics showing that continued advertising would accomplish anything. At this point, there’s no reason to believe it is needed. I think it’s obvious that that funding could be better used for something else.”
According to Schuitmaker, Senate Bill 542 has stalled because it might not be the most promising way of putting a stop to the advertising.
“The committee chair and I have been batting around the idea of putting it (the language prohibiting the advertising) in an appropriations bill,” Schuitmaker said.
In addition to being chair of the Senate Health Policy Committee, Sen. Mike Shirkey, R-Clarklake, is also one of the bill's co-sponsors.
“The intent of the legislation Sen. Schuitmaker introduced is very legitimate,” Shirkey said. “I, too, question the need to advertise Healthy Michigan for the purpose of increasing enrollment. I’ve talked with officials involved with the program and the sense is that we’ve pretty much topped out as far as enrollment is concerned; the levels have remained more or less constant for quite a while now.”
“That said; I also understand that everyone does not have the same access to information regarding all aspects of Healthy Michigan,” Shirkey continued. “We have talked about attempting to put something into appropriations legislation that would allow advertising that pertains to Healthy Michigan for utilitarian purposes within the program, but specify that advertising should not be directed toward increasing enrollment.”
Among the possible advantages of having the language put into an appropriations bill is that it would insert the issue directly into the appropriations process. That would mean that the state budget would reflect the Legislature's intent for the advertising. In addition, it is often more difficult politically to vote against an entire appropriations bill than it is to vote against a single-topic bill, such as Senate Bill 542.
Snyder’s Deputy Press Secretary Laura Biehl was asked about the prohibition.
“As with all legislation, the governor will review the bill if it reaches his desk,” Biehl said.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
New Study Says Pure Michigan Campaign Not As Advertised
The Mackinac Center is scheduled to release its study, “Pure Michigan: State Promotion Generates Negative Return on Investment” in March. The early results were released last year and found that state promotion efforts do have a tiny, positive impact in one respect, but on balance remain a net negative for Michigan. The authors make a number of recommendations; chief among them is ending the program altogether.
The Pure Michigan campaign — which marks its 10th anniversary this year — is a taxpayer-funded effort to promote the Great Lake State. As part of its advertising effort it runs attractive television commercials featuring narration by Michigan-born actor Tim Allen. The idea behind the program is to spur more tourism in and to the state and thus encourage economic development. The program is operated by Travel Michigan, a government agency inside the state’s “jobs” department, otherwise known as the Michigan Economic Development Corporation.
To measure the impact that state-subsidized promotion has on the state’s economic fortunes, scholars Michael Hicks and Michael LaFaive built a statistical model around 39 years of data about spending by the 48 contiguous states to promote tourism. The model attempts to take into account other factors that might drive tourism spending. These include geographic features such as distances to a large body of water or mountains, as well as recessions, changes to population and trends in tourism.
Hicks and LaFaive found that every additional $1 million the state of Michigan spent on promoting tourism generated the state’s hotel and motel (accommodations) industry a miniscule amount of additional economic activity, or revenue. In fact, the benefit was so small that it is absolutely swamped by the cost of obtaining it. In other words, the cost of the program cannot justify the benefits. The Pure Michigan advertising campaign is even less impressive if one remembers that the money used to fund the campaign would likely have been spent more profitably had it been retained by taxpayers, or even used for a different public program such as road maintenance.
Unlike the official reports used to justify the Pure Michigan campaign, the Mackinac Center’s analysis is 100 percent transparent. The model will be explained in detail in the study’s appendix and its related dataset made available on the center’s website.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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